Europe Roundup: Euro falls to eight-week low, European shares slump, Gold gains 1%,Oil drops below $60-Janaury 27th,2020

Market Roundup 

• China says virus ability to spread getting stronger

• German Jan Business Expectations 92.9, 95.0 forecast, 93.9 previous

• German Jan Current Assessment 99.1, 99.2 forecast, 98.8 previous

• German Jan Ifo Business Climate Index 95.9, 97.0 forecast, 96.3 previous

• UK Gross Mortgage Approvals 46.8K, 44.1K previous

• France Jobseekers Total 3,292.9K, 3,302.9K previous

Looking Ahead - Economic Data (GMT)  
 
• 15:00 US Dec New Home Sales  730K, 719K previous

• 15:00 US Dec New Home Sales (MoM)  1.5% forecast,1.3% previous

• 15;30 US Jan  Dallas Fed Mfg Business Index  -3.1, -3.2 previous  
 
Looking Ahead - Events, Other Releases (GMT)

• 14:30 US FOMC Member Williams Speaks                            
Fx Beat

EUR/USD: The euro declined against the U.S. dollar on Monday, as downbeat German business sentiment data weighed on single currency. German business morale deteriorated unexpectedly in January as the outlook for services darkened, a survey showed on Monday, suggesting that Europe’s largest economy got off to a slow start in 2020 after narrowly avoiding a recession last year. The euro was down 0.05 percent at $1.1022. An index that tracks the dollar versus a basket of six major currencies was up 0.02 at 97.91 on Monday. Immediate resistance can be seen at 1.1055(5 DMA), an upside break can trigger rise towards 1.1083 (9 DMA).On the downside, immediate support is seen at 1.1016 (Daily low), a break below could take the pair towards 1.1000 (Psychological level).

GBP/USD: Sterling was little changed against dollar on Monday, as investors remained cautious ahead of a key Bank of England interest-rate decision later this week. This week will be dominated by central bank meetings with the Federal Reserve interest rate decision due on Wednesday and the Bank of England’s policy decision expected on Thursday. The pound was down 0.03% against the dollar, at $1.3064, the lowest level since Dec. 27. Immediate resistance can be seen at 1.3109 (Daily high), an upside break can trigger rise towards 1.32905 (Higher BB).On the downside, immediate support is seen at 1.3050 (50 DMA), a break below could take the pair towards 1.2960 (Lower BB).

USD/CHF: The dollar edged lower against the Swiss franc on Monday, as investors shunned riskier assets on growing concerns over the scope of a China virus outbreak. Safe-haven assets were in demand as the death toll from the outbreak in China rose to 81 and the virus spread to more than 10 countries including France, Japan and the United States. Some health experts questioned whether China can contain the epidemic. At (GMT 12:33), Greenback dipped 0.11% versus the Swiss franc to 0.9699. Immediate resistance can be seen at 0.9719 (Daily high), an upside break can trigger rise towards 0.9743 (Higher BB).On the downside, immediate support is seen at 0.9677 (9 DMA), a break below could take the pair towards 0.9640 (Lower BB).

USD/JPY: The dollar declined against the Japanese yen on Monday, as escalating fears about the spread of a coronavirus from China sent investors into safer assets. The yen, frequently viewed as a safe haven, was the main beneficiary, although the move was contained. The Japanese currency briefly rose to its highest since Jan. 8. At (GMT 12:33) the dollar was 0.27 lower versus the Japanese yen at 108.95.  Strong resistance can be seen at 109.17 (50 DMA), an upside break can trigger rise towards 109.68 (Jan 24th high).On the downside, immediate support is seen at 108.64 (100 DMA), a break below could take the pair towards 108.00 (Psychological level). 

Equities Recap

European shares declined on Monday as investors fretted over the potential economic damage from the fast-spreading coronavirus.      
 
At (GMT 12:37),UK's benchmark FTSE 100 was last lower higher at 2.12 percent, Germany's Dax was down by 2.22 percent, France’s CAC was last down by 2.17 percent.

Commodities Recap

Gold jumped 1% on Monday to a near three-week high as growing concerns that the coronavirus outbreak could impact the global economy pushed investors to safe havens.

Spot gold was up 0.8% at $1,582.41 per ounce by 1025 GMT, having earlier touched its highest since Jan. 8.U.S. gold futures rose 0.7% to $1,582.10 per ounce.

Crude prices extended declines on Monday, dropping below $60 for the first time in nearly three months as the death toll from China’s coronavirus rose and more businesses were forced to shut down, stoking expectations of slowing oil demand.

Brent crude fell by $1.95 a barrel, or 3.2%, to $58.75 by 1128 GMT, its lowest since late October and the biggest intra-day fall since Jan. 8.U.S. crude was down by $1.77, or 3.3%, at $52.42.

Treasuries Recap

U.S. Treasury prices advanced, pushing down yields. The benchmark 10-year note’s yield fell to a three-and-half-month trough of 1.627%.

The Italian 10-year yield fell to a three-month low Monday after right-wing leader Matteo Salvini failed in his bid to overturn decades of leftist rule in the northern region of Emilia-Romagna on Sunday.

The yield on the safe-haven German Bund also fell to its lowest in weeks on the back of growing concern that China’s coronavirus is more of a threat than anticipated.

The benchmark 10-year Bund yield declined to an eight-week low of -0.35% and was last down 1 bps.